You seem to have conflated a few issues here. It would be less confusing to refer to 51% being the option and the 49% as the residual, and for which no option agreement exists.
What Xstrata wants and what it can legally compel are 2 different things. The residual 49% is always entirely a matter if the parties voluntarily agree regardless of how the option on the 51% unfolds.
This is not like getting a controlling interest in a company board; no voting rights attach to it.
For practical reasons it may be easier to run a mine entirely owned by one party or the other, and it may be how things usually roll. But it's not impossible to do otherwise. An operating agreement would take care of functional matters on a shared owner mine.
I have made minor amendments to your scenarios 1) and 2)
1) XStrata accepts the independent valuer's price for 51%, and Altona accepts the price for 49% remaining at the same price valuation. i.e. total acceptance. Deal for 100% of Roseby goes ahead.
2) XStrata rejects the independent valuer's price for 51% and there is no agreement applying that price to the other 49% of Roseby. The option and the remainder falls through.
(IMO This is far from a disaster, as there are partners waiting in the wings and the full value of Roseby can be ultimately enjoyed by shareholders.)
AND more critically
3) XStrata accepts the 51% offer, but no agreement is reached on the residual 49%. AOH has no control over this, but if it decides the valuation amount is inadequate it can decide not to sell the residual amount to Xstrata for that amount.
Another scenario then arrives: more negotiations? will Xstrata pay the balance AOH is holding out for, to get 100% of the mine?
Or will AOH refuse to sell the remainder, considering that the valuation is inadequate? This might be especially so in relation to the undiscovered resource. How can this ever be adequate? It's guesswork surely?
"Only XStrata can decide" is therefore not accurate. The valuers price is critical for determining full value only of the 51%.
The documentation and drilling results are critical for relevant matters taken into account in reaching the valuation. The drill results that AOH has can be used to calculate inferred resource.
An operating agreement may have already been drafted as part of the relevant documentation submitted by AOH as part of the valuation process,this could include a scenario for the 100% and one for shared holdings.
We dont know if Xstrata intends to operate the mine - if it owns 100% roseby? - if it only holds 51% of the resource.
Yet Xstrata being left with 51% is entirely possible. Do they like running shared mines themselves? Perhaps not so much.
How efficiently the mine operation is set up, including chain of command and responsibilities, materially affects its value as a going concern, and may well be taken into account as part of the valuation process. If AOH is going to run it, there could be a $ value in that contribution, and they may want to have control over the day to day running of the mine.
I did a rather long post about a month ago on the relevant matters the valuer takes into account, and that is certainly broad under the valmin code http://www.valmin.org/index.asp.
From the way AOH has conducted itself so far, it appears to be ahead of the curve and has done it's homework on how they can get maximum value for shareholders. The fact that price was not agreed, and we are with the independent valuer suggests to me that they are not handing this one over and we are in scenario 3 territory.
Anyway, just thinking this through, a lot of it is logic and guesswork of course. Happy to be corrected on any of this.
IMO.
AOH Price at posting:
28.0¢ Sentiment: LT Buy Disclosure: Held
